Maintenance and construction firm Transfield Services made a return to profitability in the first half of fiscal 2014 after incurring massive losses in the previous corresponding period.
Transfield earned net profits of $4.6 million during the six month period to December 31, for a major reversal compared to the staggering loss of $246.7 million that the company incurred in the previous corresponding period.
The company said it managed to achieve the turnaround in profits via concerted cost cutting efforts during the first half of 2014, as well as reductions in capital expenditures and the high volume of trade creditors.
Transfield also engaged in the sale of a considerable volume assets in Abu Dhabi and Qatar, which served to bump its bottom line higher.
Transfield pointed out that activity levels in Australia and New Zealand were still tepid during the first half of the current fiscal year, but that revenues still held firm with overall margins edging lower by just 0.2 per cent.
The Australian and New Zealand infrastructure sector continues to comprise the mainstay of the company's business. Transfield sees the level of activity in the sector remaining similar in the second half of the fiscal year, albeit "with the return of more positive momentum expected in the final quarter of the financial year."
While the company expects the mining and processing industries, and exploratory activity in particular, to remain weak throughout Australasia, it also foresees robust growth in the coal seam gas, LNG and oil sectors in the short term, as key projects approach their operational phase.
Transfield also said that it would continue to offload non-core assets in areas such as its Indian operations over the next one or two years, following the sale of assets in Abu Dhabi and Qatar in the first half of fiscal 2014.
The company will refrain from paying an interim dividend to shareholders.
Transfield recently experienced a sharp spike in share prices after it won a $1.22 billion deal from the Australian government to operate two of its offshore detention centres, as controversy swirls over a fatal outbreak violence at the Manus Island centre.